VCSH Stock Recent News

Rate cut expectations pushed more investors into investment-grade corporate bonds the past quarter, giving the asset class their best performance in nearly a year. “US high-grade corporate bonds logged their first quarterly gain this year in the past three months, returning 5.

Rate cuts can produce a macroeconomic environment conducive to corporate bonds, allowing companies to borrow more money at lower rates. This could see more investors move into corporate bonds for greater yield opportunities.

Despite the heavy volatility during the month of August, ETFs saw a record number of inflows. This includes bond-focused funds, which are offering opportunities in corporate debt.

The closing gap in credit spreads after the August 5 sell-off is bringing corporate bonds back into the spotlight. Those looking for an intermediate bond ETF with yield opportunities and a muted credit risk profile should take a closer look at the Vanguard Interim-Term Corporate Bond ETF (VCIT).

The August 5 sell-off may have spooked investors from riskier assets, but tightening credit spreads between high-quality and high-risk bonds shows that investors may be returning to corporate bonds again. A weak July jobs report sparked recession fears, spurring a flight to safe haven assets like Treasuries.

Whether it's due to a correction or potential recession, the stock market is certainly experiencing a heavy dosage of volatility. Given this, it's an ideal time to add bonds, especially if they are poised to outperform stocks over the next 10 years.

Yield may be the prime motivator for adding exposure to bonds. But fixed income investors should also look to mitigate default and rate risk.

When looking to pair yield and credit quality, corporate bonds are an ideal option, especially when it comes to investment-grade. Additionally, investors also laud the diversification benefits they offer to a fixed income portfolio.

Morningstar highlighted a list short-term bond funds that include a pair of Vanguard ETFs specifically for fixed income investors looking to park cash in the interim. With rate cuts expected to occur at some point, taking advantage of the high yields now is a prime reason to consider bond funds.

Corporate bonds continue to garner interest as investors may be locking in current yields now before eventual rate cuts take place. In the meantime, it's an ideal time to consider corporate bond funds, especially given the attractive yields.